Agenda and minutes

Audit & Accounts Committee - Tuesday, 24th November, 2020 10.00 am

Venue: Virtual Meeting

Contact: Pat Trafford. Tel. 01538 395551 


Webcast: View the webcast

No. Item


Declarations of interest

i. Disclosable Pecuniary Interests.

ii. Other Interests.

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Councillors Bentley, Flunder & Wilkinson declared “other” interests, having received COVID-19 Business Support Grants.


Minutes of the previous meeting

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Minutes 14 February 2020 pdf icon PDF 100 KB

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RESOLVED – That the Minutes of the Audit and Accounts Committee held on 14 February 2020 be APPROVED as a correct record and signed by the Chair.


13 July 2020 pdf icon PDF 44 KB

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RESOLVED – That the record of decisions made under urgent powers dated 13 July 2020 regarding the Annual Treasury Management Report 2019/20 and the Internal Audit Annual Audit Plan 2020/21 be APPROVED as a correct record.


At this point, Councillor Yates raised a point of order with regard to the size of the agenda and the lengthy nature of the documents contained within, stating that meetings should be more frequent leading to less agenda items.


Deputy Director for Finance, Income & Procurement - Claire Hazeldene (CH) - confirmed that this meeting was exceptional, in that 1 meeting earlier in the year had been missed due to COVID-19 restrictions, thus compressing 2 agendas into 1. Most of the documents had been published earlier than usual to give members more time to read them prior to the meeting.



Audit Findings Report - External Audit (Decision Required) pdf icon PDF 598 KB

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Michael Green – Grant Thornton Key Audit Partner – and Avtar Sohal – Grant Thornton Director – thanked the SMDC Finance Team and presented the report confirming that the audit of the Council’s accounts was substantially complete and was almost ready to sign off. An unqualified audit opinion was anticipated by the amended 30 November 2020 deadline.


The ongoing COVID-19 situation had resulted in a statement being included in the report regarding a material uncertainty regarding the valuation of Council land, buildings and Pension Fund, but this was an across-the-board statement applied to all Local Authority Accounts audits this year. There had been a small number of minor disclosure errors found, all of which had been corrected. An unqualified Value For Money conclusion was also anticipated.


Annual Governance Statement (Decision Required) pdf icon PDF 113 KB

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CH informed members that the statement needed to be approved prior to the approval of the accounts (following agenda item).


Governance issues were tabulated within the statement, with 2 new issues raised – a) Achievement of Corporate Objectives due to the COVID-19 pandemic, and b) Affect on the Council’s governance arrangements following the departure of Alliance Leadership Team members.


RESOLVED – That the Annual Governance Statement 2019/20 be APPROVED.


Statement of Accounts (Decision Required) pdf icon PDF 174 KB

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Acting Head of Finance,– Keith Pointon (KP) – confirmed that Part 2, Section 8(2) of The Accounts and Audit (England) Regulations 2011state that the Chief Finance Officer signs the Statement of Accounts by 31 May each year. Owing to the COVID-19 pandemic this deadline was lifted and the authority released its draft statements on 3 July 2020. The revised deadline for publication of the final, audited accounts was 30 November 2020. The formal inspection period was also delayed and commenced on 7 September 2020 for 15 working days.


Appended to the report was the Chief Finance Officer Review with ‘frequently asked questions’ and responses. Queries from members were as follows (Responses in brackets):-

·         Under ‘Short Term Debtors’, an underspend on Disabled Facilities Grants (DFG) is attributed to COVID-19, which didn’t start until March 2020 – almost the end of the year (A delay in the DFG programme with the service provider meant that the expected ‘catch-up’ in March couldn’t happen. £187,000 was attributable to this.)

·         With BREXIT making importing / exporting difficult, should the Council be investing in the community, with small business units being provided to help with the COVID-19 recovery? (Considerable uncertainty at the moment. The Chancellor of the Exchequer’s Annual Statement due the following day things were likely to become clearer.)


RESOLVED – That the Statement of Accounts 2019/20 be APPROVED.


Redmond Review Briefing Report pdf icon PDF 71 KB

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Sir Anthony Redmond conducted a review of the effectiveness of local audit and its ability to demonstrate accountability for audit performance to the public. The findings were published in September 2020 and recommendations centred around 3 key areas:-


·         Audit Performance;

·         Governance Arrangements; and

·         Financial Reporting.


The Government now had to decide what to do in the light of the recommendations under each of the 3 headings above.


Independent Member Harry Mawdsley (HM) stated that 1 area where SMDC was lacking was in having an Independent Member with a financial background, following the passing away of the previous occupant of that position. CH advised that there was a need for a ‘Skills Assessment’ of current committee members to establish where training was required.


RESOLVED – That the report be NOTED.


Internal Audit Progress Report pdf icon PDF 89 KB

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Head of Audit – John Leak (JL) presented the report showing the position as at 31 October 2020. The COVID-19 pandemic and unplanned investigative work had delayed the completion of the 2019/20 Audit Plan. In addition, the follow up of audit recommendation implementation was temporarily paused until 31 May 2020. A return to normal levels was expected over the coming months.


All audit recommendations had been agreed at to date 66% of 2019/20 and 100% of 2020/21 recommendations that were due had been implemented.


10 audits had been completed since the previous report, 4 achieving ‘substantial’ status and 6 ‘satisfactory’. A further 9 audits were in progress, with 43% of the 2020/21 Audit Plan completed. In response to member queries, JL confirmed that an audit on Climate Change was contained in the 2021/21 Audit Plan.


RESOLVED- That the report be NOTED.


Corporate Governance Review pdf icon PDF 87 KB

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The review was undertaken as part of the Audit Service’s 2020/21 Audit Plan and was subsequent to a significant change in the Council’s Senior Management Team following the resignation of the former Assistant Chief Executive and retirement of the former Chief Executive in February 2020 and March 2020 respectively.


Recommendations contained in the report had all been agreed and would give greater transparency going forward. Further feedback regarding implementation of the recommendations would be reported to the next meeting of the Audit & Accounts Committee.


RESOLVED – That the Audit Service’s 2020/21 review of the Council’s corporate governance arrangements be NOTED.


Internal Audit Annual Report pdf icon PDF 103 KB

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The 2019/20 Audit Plan took longer to work through than usual due to the effects of the COVID-19 pandemic and 90% of the plan was completed. Remaining audits had been rolled over into 2020/21.


A total of 8 service areas were given substantial assurance that risks material to the achievement of the systems objectives were adequately managed. 21 were given satisfactory assurance, 1 was given limited assurance and none were given unsatisfactory assurance. Internal Audit was able to provide reasonable assurance that the Council’s governance arrangements including risk management and systems of internal control were operating adequately and effectively.


Members queried the effectiveness of home-working during the pandemic and the likelihood of de-centralised hubs going forward? JL and CH confirmed that  the positive outcomes of home-working were being examined for the future bearing in mind the associated risks. Feedback gained from staff was mostly positive and any difficulties experienced had been resolved. An internal COVID-19 Recovery Group had been set up.


RESOLVED – That the Audit Service’s 2019/20 year end performance information and that the opinion on the overall adequacy and effectiveness of the Council’s internal control environment be NOTED.


Treasury Management Update pdf icon PDF 71 KB

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Finance Business Partner – Emily Bennetts (EB) – confirmed the position as at 30 September 2020, with headlines as follows:-


·         There was no expectation for any increase to the Bank of England base rate within the medium term;

·         The COVID-19 pandemic and resulting economic crisis was considered in terms of the impact on treasury management, in particular the cash flows;

·         A shortfall of £48,720 was forecast against the investment income budget due to reducing interest rates;

·         An income shortfall of £40,410 was forecast on the Ascent loan interest due to lower interest rates than forecast. The Debenture income was forecast on target. This was subject to change pending the Ascent delivery model review and any new loan arrangement;

·         The borrowing costs budget to support the existing Ascent loan balance and general fund borrowing requirement was forecast to be £132,830 under budget due to low Intra-Local Authority borrowing interest rates available;

·         The average return on investments was 0.25% during quarter 2. This had reduced from 0.40% in quarter 1;

·         The Council’s investment portfolio totalled £16.3million spread across 7 separate institutions as at 30 September 2020;

·         The Council’s external debt was forecast to be £16million by the end of the year at an average annual borrowing rate of 0.88%.


Government COVID-19 related grant monies which had been received in April 2020 resulted in an extension to the usual Counterparty limits. Conversely, deferred Business Rates payment plans also affected the Council’s cash flows.


RESOLVED – That the Treasury Management position at 30 September 2020 be NOTED.


Annual Review of the Effectiveness of Internal Audit pdf icon PDF 95 KB

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The Accounts & Audit Regulations 2015 required the Council to, each financial year, conduct a review of the effectiveness of the system of internal control, and that the findings of this review must be considered by a committee or by members of the authority meeting as a whole. This report formed part of the review. The 2019/20 self-assessment had uncovered no areas of significant non-conformity.


There was also a requirement for an external assessment of Internal Audit (EQA) to be conducted at least once every 5 years. The previous EQA was completed in the 2016/17 year and was therefore due again during 2021/22.


RESOLVED – That the report be NOTED.



Review of the Effectiveness of the Audit & Accounts Committee (Decision Required) pdf icon PDF 64 KB

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The review was required under the Accounts & Audit Regulations 2015. The CIPFA Checklist Self Assessment was appended to the report, together with the CIPFA Assessment Tool. The checklist had been completed by JL and AS.


Also appended were the committee’s Terms of Reference, which had been agreed by the committee in 2019 but not formally approved by Full Council.


Members raised points as follows:-


·         The committee should be more pro-active. An annual report was required;

·         There was a clear need for a 3rd Independent Member who had a financial background.


RESOLVED – That the annual review of the effectiveness of the Audit & Accounts Committee be APPROVED.


FURTHER RESOLVED – That the Audit & Accounts Committee’s Terms of Reference be recommended to Full Council for APPROVAL.


Work Programme pdf icon PDF 71 KB

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The Committee considered the Work Programme for the remainder of 2020/21and into 2021/22.


The Chair requested a ‘Fraud and Corruption update’ at each meeting, rather than annually.


RESOLVED – That the Work Programme for 2020/21 and into 2021/22 be APPROVED.


Exclusion of the Press and Public

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That, pursuant to Section 100A(2) and (4) of the Local Government Act, 1972, the public be excluded from the meeting in view of the nature of the business to be transacted or the nature of the proceedings whereby it is likely that confidential information as defined in Section 100A (3) of the Act would be disclosed to the public in breach of the obligation of confidence or exempt information as defined in Section 100 I (1)  of Part 1 of Schedule 12A of the Act would be disclosed to the public by virtue of the Paragraphs indicated.



Work Programme


Members discussed a matter relating to the provision and administration of Disabled Facilities Grants.